SUMMARY AND GENERAL CONCLUSIONS
In the context of the transition from the era of pre-restructuring during
the 1970s to the era of restructuring in the 1990s, the principal thesis
of this study is, that negative macro developments in Suriname have implications
for processes at the micro level. In connection with this research problem,
two processes at the macro level were identified and dealt with. The first
is the negative macroeconomic performance of Suriname since the 1980s due
to the decline in the bauxite mining and processing sector, the suspension
of Dutch development aid, and the implementation of structural adjustment
policies, which resulted in a declining standard of living. The second
macro development is the relatively high growth of the urban labor force
and particularly of the working population in the 1978-1993 period. These
macro developments were assumed to influence urban poverty, changes in
the urban employment structure and informality.
Poverty
Empirical evidence was obtained that food is the best predictor of the total necessary household expenditures. The three food poverty scales, which were designed to determine the objective poverty line, were related to the costs of a Basic Food Basket, which was developed specifically for this study. Of the urban households we found that 69.5% live below the poverty line, according to the YPR, the income poverty ratio . This proportion should be considered the upper limit of the urban poverty line as it is assumed that there was an underreporting of the second and third job.
To explain poverty, a principal distinction was made between internal and external factors. Internal factors refer to demographic, economic or socio-structural variables in Suriname, such as the household size and the net household income . External factors refer to income or material support obtained from abroad, such as remittances. The hypothesis formulated states:
The 1993 survey examined at the subjective level the opinion regarding survival mechanisms utilized by households. The importance of remittances is once more demonstrated. We found that non-poor households stand out in terms of their greater dependence on remittances than poor households.
The subjective perception of poverty corresponds fairly well with the
objective standard as almost all (94.2%) below the objective poverty line
(YPR) perceive the net household income as insufficient. This does not
minimize the limitation of the measurement of subjective poverty in this
study, as this was measured by only one question. In addition, the operationalisation
was broad, inviting many respondents to answer affirmatively the question
on the sufficiency of the household income.
Employment restructured
Processes of change in the urban employment structure, as well as the factors that influence these changes were examined by means of longitudinal designs. To reduce the possibility that time is a substitute variable for all sorts of events that occurred between the periods of observation (1978 and 1993), gender, age and education, which are assumed to be of influence, were included in the analysis. The variable 'time' refers to the restructuring process, whereby the year 1978 is in the pre-restructuring period and 1993 in the restructuring period.
A principal hypothesis with regard to the restructuring of the urban working population states that:
Loglinear analysis gave evidence that age, gender and education influence
differences between employment status in 1978 and 1993. However, controlling
for these variables time has an effect on employment status resulting in
a significant difference in employment structure at these two points in
time. Another more specific conclusion is that employment status is influenced
by two three-way interactions: the effect of gender on employment status
differs for the various age categories ; and the effect of time on employment
status is different for the categories of gender. In this regard an interesting
finding is the 'feminization of the public sector', which indicates that
an increasing proportion of older females have been employed as civil servant
in the public sector (Figure 3 Civil servants by time and gender, controlling
for age).
Employment mobility
The analysis of change was extended to the labor force by examining mobility from the previous to the present socioeconomic status in the 1971-1978 and 1986-1993 intervals. The idea behind this analysis was that if restructuring has an effect it should also change the mobility patterns within the total labor force. Compared to the analysis of employment status of the working population, the definition of status was broadened by including non-working categories such as the unemployed and first-time jobseekers. For both the pre-restructuring and the restructuring period, the time interval has been deliberately chosen. From a national point of view, the 1971-1978 period can be considered the pre-restructuring period for Suriname, culminating in an economic boom from 1975 to 1978 due to the huge amounts of Dutch development aid. This contrasts with the 1986-1993 restructuring period, which starts with a recession and subsequently is characterized by a deterioriating macroeconomic environment.
Like the analysis of the distribution of the working population by employment status, it was assumed that processes at the macro level have a major impact on differences between employment mobility in the 1970s and 1980s/1990s. The null hypothesis was formulated as follows:
Macro processes
The fact that time influences changes in employment mobility as well as employment status indicates once more the importance of the restructuring process at the macro level. The identified differences between the pre-restructuring 1970s and the restructuring 1980s/1990s were assumed to be due to macro developments: the reduced Dutch aid inflow, the declining formal employment and the impact of structural adjustment policies. To specify the impact of macro developments on the restructuring of employment, three processes were described: the way the various employment categories absorbed the increased labor force, labor income differences, and labor absorption by economic sectors.
The 'not employed' (unemployed, housewives, retired) and students are by far the largest suppliers of the labor force. With respect to the absorption of the labor force it was shown that in the pre-restructuring era of the 1970s, a relatively major proportion of the not employed became civil servants, compared to only a minor share going to wage workers in larger enterprises. This growth of civil servants should be linked to the boom caused by Dutch development aid, which, since 1975, occurred in the context of a state interventionist development strategy and the concommitant expanding public sector.
The restructuring of the Suriname economy since the 1980s, resulted in a diminished capacity of the official economy to absorb labor. Students and housewives showed a strong mobility towards wage-work. The same holds for housewives towards selfemployment. On the other hand, the absorption of these categories by civil servants decreased relatively if compared to the 1970s. Conversely, the mobility of students towards wage workers increases the nearer the time interval approaches 1993. The same pattern was found for the unemployed, an increased share of whom moved to wage workers in the last
1990-1993 wave.
A clear illustration of the way restructuring at the macro level influences the employment structure is given by the specific analysis of civil servants. Due to the restructuring process the financial situation of the public sector deteriorated since the mid 1980s, resulting in declining opportunities for civil servants in terms of income and job creation. The complex process of declining jobs for civil servants has come about via the interaction of time and demographic processes (gender and age). As a consequence, in the restructuring period of the 1990s, there is less absorption of younger age categories, a relative decline of older males, and stability of older female civil servants.
A ranking of employment status was made, indicating that persons could
move from low-income jobs to high-income jobs. In 1978 the ranking from
high to low-income employment categories is as follows: Employer, microentrepreneur,
wage worker, civil servant, selfemployed, and microenterprise worker. An
important change in 1993 is that civil servants went from the fourth to
the fifth rank. Consequently, in 1993 persons could move from civil servants
to self-employed, rather than the reverse. But in 1978 the opposite was
the case and selfemployed could move to civil servants as the latter on
average had better income opportunities (Figure 4 Employment status by
mean labor income 1978 and 1993).
These indications correspond with the changes found in the employment structure as well as employment mobility from the 1970s to the 1980s /1990s, which show a decrease of civil servants and an increase of selfemployed.
The decline of employment in the mining and trade sectors contrasts
with the growth of financial services, community and personal services
in the 1978-1993 period. The absorption of labor by these sectors is related
to the increase of wage workers and selfemployed, the two fastest growing
employment categories. Furthermore, of those employed in community/ personal
services, a relatively large share originates from the previous non-working
categories of unemployed, housewives, retired and students, who probably
enter jobs with a high informality.
Informality
Three issues on urban employment and their relation to informality were examined.
The first issue deals with the question, whether the ranking of employment
categories by informality meets the theoretical assumption that selfemployed
have the highest degree of informality, and wage workers in larger enterprises,
the lowest. Based on an informality index designed for this study, the
theoretically assumed ranking of employment categories by informality was
supported by empirical results, which show the highest informality for
the self-employed, followed by microenterprise workers, employers (microentrepreneurs),
wage-workers, and finally civil servants (Figure 5 Employment status by
informality).
Taking also into account the strong relationship between informality and the number of working persons in the enterprise, we concluded that the designed index is a reasonably valid instrument for informality. By evaluating the components of this index, we learned that amidst the controversies and many definitions of informality, it is useful to design an informality instrument based on legality and conditions of work. Depending on the theoretical approach, it is still possible to examine aposteriori the relationship between informality and other related dimensions. This was done in this study with regard to unionization.
We found that unionization declined, especially between 1986 and 1993. This finding corresponds with the institutional theory, which argues that employment restructuring is the result of institutional factors such as unionization or labor legislation. This point of view originates from the underground economy approach, which focuses on large (formal) enterprises that evade costs of minimum wage and taxes by employing unprotected labor. According to this approach, the lack of labor protection is the principal criterion for informality. In the case of Suriname, this relationship holds also for wage workers in larger enterprises.
The second issue relates informality with macro developments. The assumption here is that due to the restructuring process at the macro level, informality would increase at the end of the 1980s and in the 1990s. The empirical findings clarify the impact of macro developments on employment restructuring in terms of informalization in various ways. Regression analysis gave evidence that apart from dummy variables related to employment status, the following variables explain a major proportion of the total variation in informality: ownership of the means of production, period of entering the present job, building and construction, and age. The link between these and other relevant variables with macro processes was further examined.
i) By examining the relationship between the period of entering the present job and informality, there is evidence that informality increased since the mid 1980s. Against the background of the recession which started around 1986, followed by macroeconomic and monetary distortions, the relative growth of informality could be considered as a response to the deterioriating living situation as well as to the diminished capacity of the formal economy to absorb the increased urban labor force.
ii) There is a relationship between ownership of the means of productions and informality. This holds true, specifically for wage-workers in larger enterprises and microenterprise workers. Half of the small number of informal wage-workers in larger enterprises own the means of production; this contrasts with the remaining moderate or strict formals, who hardly have the ownership. Employment status was found to be an intervening variable. Contrary to the wage-workers in larger enterprises, no statistically significant relationship was found between informality and ownership for microenterprise workers. The differences between wage-workers in larger enterprises and microenterprise workers could be explained by the less favorable labor conditions for the latter. Indeed, microenterprise workers were found to have poor labor protection, which is reflected in very low unionization, irrespective of informality.
iii) It was theoretically assumed that rapid economic decline, which is accompanied by a process of informalization in particular of wage-work in microenterprises, exerts a downward pressure on the wages. This is probably also the case in the urban economy of Suriname as this employment category had by far the lowest mean income in 1993.
With regard to the third issue, which focuses on the relationship between informality and poverty, the following hypothesis was formulated:
Finally, the findings on poverty, the restructuring of employment and informality are striking for two reasons.
First, the urban poverty ratio of about 70% in Suriname is very high if compared to urban economies in Latin America, going through a restructuring process during the 1980s and 1990s, and where 45% was the highest recorded figure during the crisis in Latin America (ECLAC 1996). Probably, the small open economy of Suriname is extremely vulnerable to external shocks.
Second, as a response to negative macro developments - the increased urban labor force and the decreased macro economic performance - various changes of employment restructuring and informalization were identified at the micro level. Nevertheless, the vulnerability of the small open economy of Suriname is also related to the limited capacity of internal mechanisms or responses at the micro level (informality or benefits) to alleviate poverty substantially. The net result is the dependence on external factors in terms of remittances in various forms.